SRI LANKA's Port of Colombo is set for a new container terminal after a protracted deal with Indian port operator Adani was finalized, reports London's Loadstar.
But global disruption to shipping schedules and soaring freight rates has led more direct calls to India, as carriers choose to bypass Colombo, South Asia's biggest transshipment hub.
'Freight rates are up 500 per cent in some cases, so carriers can avoid transshipment on some services, go direct and fill up a whole ship. It makes economic sense and they can also clear the backlogs in the origin ports,' said Shippers' Academy Colombo CEO Rohan Masakorala.
The new deal signed with Adani to develop the port's West Container Terminal will add three million TEU capacity via a US$700 million build-operate-transfer agreement.
Although Colombo temporarily lost some services last year, due to a 50,000 container logjam, the current challenges are connected to the wider disruption to global shipping schedules.
'The global problem of high freight rates is prevalent in Sri Lanka and, unless you're a big contract shipper, getting space is the biggest problem,' said Mr Masakorala.
Colombo handles seven million TEU a year, 80 per cent of which is transshipment cargo moving through Colombo International Container Terminal (CICT).
'I've been arguing that the terminal operators should also look for partnerships with the shipping lines - they're cash-rich at the moment and will be looking for investments in terminals. Otherwise, we may lose their interest in the long run,' said Mr Masakorala.
'The advantage of this location and the deep drought is not available elsewhere in South Asia, the big 18,000 TEU ships won't be calling anywhere else. So that level of business will remain, but possibly the speed of growth might slow down.' said Mr Masakorala.
SeaNews Turkey
But global disruption to shipping schedules and soaring freight rates has led more direct calls to India, as carriers choose to bypass Colombo, South Asia's biggest transshipment hub.
'Freight rates are up 500 per cent in some cases, so carriers can avoid transshipment on some services, go direct and fill up a whole ship. It makes economic sense and they can also clear the backlogs in the origin ports,' said Shippers' Academy Colombo CEO Rohan Masakorala.
The new deal signed with Adani to develop the port's West Container Terminal will add three million TEU capacity via a US$700 million build-operate-transfer agreement.
Although Colombo temporarily lost some services last year, due to a 50,000 container logjam, the current challenges are connected to the wider disruption to global shipping schedules.
'The global problem of high freight rates is prevalent in Sri Lanka and, unless you're a big contract shipper, getting space is the biggest problem,' said Mr Masakorala.
Colombo handles seven million TEU a year, 80 per cent of which is transshipment cargo moving through Colombo International Container Terminal (CICT).
'I've been arguing that the terminal operators should also look for partnerships with the shipping lines - they're cash-rich at the moment and will be looking for investments in terminals. Otherwise, we may lose their interest in the long run,' said Mr Masakorala.
'The advantage of this location and the deep drought is not available elsewhere in South Asia, the big 18,000 TEU ships won't be calling anywhere else. So that level of business will remain, but possibly the speed of growth might slow down.' said Mr Masakorala.
SeaNews Turkey